Sale of Shoppers Drug Mart to KKR Agreed

British American Tobacco PLC
18 November 1999


IMASCO TO RECOMMEND BRITISH AMERICAN TOBACCO OFFER

FINAL PRICE C$41.60 PER SHARE

SALE OF SHOPPERS DRUG TO KKR AGREED

                                    
British American Tobacco announces that it has agreed a final price of
C$41.60 per share in cash to acquire all the shares of Imasco it does
not already own.  The Board of Imasco and the Independent Committee have
agreed to recommend that shareholders of Imasco vote in favour of the
transaction at a meeting expected to be held in January 2000.

The agreement with Imasco on 2 August, approved by British American
Tobacco shareholders on 15 October,  provided for a minimum cash
consideration of C$40 per Imasco Common Share which could be increased
depending on the outcome of sales processes for Imasco's drug retailing
business, Shoppers Drug Mart, and its Genstar land development company.

Following the process established in the agreement with Imasco of 2
August, British American Tobacco has accepted an offer from an investor
group led by Kohlberg Kravis Roberts & Co. (KKR) to purchase Shoppers
Drug Mart for C$2.55 billion (£1.1 billion) in cash, conditional upon
completion of the acquisition of Imasco.  The sale of Shoppers to KKR
will take place shortly after completion of the principal transaction.

British American Tobacco has now agreed with Imasco to increase the
offer price to the public shareholders by a total of C$1.60 per Imasco
Common Share to arrive at a final price of C$41.60 per share payable in
cash, a total consideration of C$10.68 billion (£4.50 billion).  The
additional C$1.60 is made up of:-

(a)  C$1.02 per share representing a full pass-through of the price for
the sale of Shoppers to KKR over the base amount of C$2.1 billion agreed
as part of the original offer.

(b)  C$0.58 per share in respect of an agreed valuation of Genstar and
the reduction in Imasco's forecast underlying net borrowings at the
closing date compared with the level estimated at the time of the
original offer to Imasco.

British American Tobacco will retain the full net proceeds from a future
sale of Genstar.

As already announced, British American Tobacco has agreed in respect of
Imasco's 98.2% shareholding in CT Financial Services to accept a tender
offer from TD Bank to be completed immediately following British
American Tobacco's acquisition of Imasco.  This transaction, which is
interconditional with the acquisition of Imasco by British American
Tobacco, will result in proceeds of C$7.85 billion.

British American Tobacco's initial net cash outlay, including Imasco's
existing borrowings and net of the consideration for the
interconditional sale of CT Financial Services, is expected to be
approximately C$4.4 billion (£1.9 billion). This will be funded
substantially from British American Tobacco's cash resources and
borrowing facilities.  This figure will be reduced by disposal proceeds
from Shoppers and Genstar

The Board of Directors of Imasco has decided to recommend the principal
transaction to shareholders.  As part of the process, which included
establishing an Independent Committee of the Board, a financial adviser
has prepared a formal valuation of Imasco.  The C$41.60 price is
slightly less than the mid-point of the valuation range and accordingly
the principal transaction requires approval by more than 662/3% of the
Imasco shareholders voting at the meeting (other than British American
Tobacco).

It is expected that the documentation relating to the Imasco transaction
will be sent to the Imasco shareholders in mid December and that the
Imasco transaction and sale of Shoppers will be completed in early
February.

For the year ended 31 December 1998, Shoppers Drug Mart had profit
before tax of C$199 million and at that period end had net assets of
C$633 million.

Goldman Sachs and Nesbitt Burns are advisers to British American Tobacco
on the Imasco transaction.  Goldman Sachs and RBC Dominion Securities
advised on the sale of Shoppers.


Commenting on the agreement with Imasco, Martin Broughton, Chairman of
British American Tobacco, said:-

'I am delighted that the agreement to sell Shoppers at a very
satisfactory price has enabled us to agree a final offer price with the
Board of Imasco which they will recommend to their shareholders.  The
processes have worked well and the result is a testament to the
outstanding value created by Imasco's management for all their
shareholders.  We look forward to welcoming Imperial and its successful
management team as a full member of the Group.'


For further information, please contact:

British American Tobacco
Michael Prideaux
Ralph Edmondson
0171 845 2888